GO Scale Capital, a group of largely Chinese investors, have paid $3.3 billion to pick up an 80.1 percent stake in Philips car and lighting subsidiary, Lumileds. Philips will keep 19.8 percent of the company although it will gradually divest itself of that share too.
The deal is expected to go through in the third quarter of this year, with the company operating under the name of Lumileds.
According to market research company Trendforce, Lumileds is the leader in high power LED products using flip chip technology.
High power LEDs face competition from many Asian LED manufacturers. Analyst Roger Chu at Trendforce believes Philips divested itself of the lighting division because revenues were steadily falling.
Chu added that Lumileds is in the top five intellectual property owners in the LED industry, and Philips will turn over 600 patents to the Lumileds consortium. He said that the major investors are Chinese and that will give Lumileds a clear advantage.
GO Scale Capital has already invested in a number of other LED companies, putting it in a strong position for the future.